New York, 11 July 2017 – The financial sector has a number of underutilised tools at its disposal to disrupt funds generated by human trafficking and modern slavery, claims a new report published today by the United Nations University (UNU), a United Nations think tank. The report, “25 Keys to Unlock the Financial Chains of Human Trafficking & Modern Slavery“, draws on insights from a unique collaboration of representatives of the financial sector, financial regulators, investigators and prosecutors, civil society and UN entities. It identifies concrete measures to break the ties between the financial sector and modern slavery.

“Human trafficking is both big business and a serious crime”, said Dr James Cockayne, the report’s author and Head of the UNU Office at the United Nation. “With an estimated 45.8 million people enslaved today, the impacts cannot be measured in dollars and cents alone. These numbers hide the stories of real people, most of them women and girls, facing abuse at the hands of criminal and terrorist groups, and in exploitative businesses. By handling the proceeds of these crimes, banks and other financial institutions risk violating anti-money-laundering and counter terrorist-financing laws. Disrupting the financial flows associated with these crimes will make a powerful contribution to improving these lives and preventing future crimes.”

UNU’s report suggests that financial sector actors and their allies are beginning to scale up their efforts. Government regulators and investigators are paying increased attention to these crimes, and serious penalties can ensue. For example, in the US, Senators Elizabeth Warren (D-Mass.) and Marco Rubio (R-Fla.) recently introduced a bill to strengthen regulation of the financial sector to reduce its use for human trafficking. Furthermore, Western Union, one of the world’s largest money service businesses, entered into a USD 586 million settlement with the US Department of Justice relating to money-laundering for various crimes, including human trafficking.

The report identifies tools already available to financial institutions to identify how and when they may be handling funds generated by modern slavery, to cease handling them, and to prevent against the risk of handling them in future. Financial sector actors are also developing tools to work together and with regulators, to strengthen sectoral knowledge tools, infrastructure, and uptake.

The report proposes specific steps to strengthen regulation and promote information partnerships among industry, regulators, and civil society actors. It proposes measures to address knowledge gaps on financial exposure to, and leverage over, human trafficking. Efforts to treat anti-trafficking issues are not only, it suggests, a compliance issue, but also should be seen as a factor in investment decisions.

“The ’25 Keys’ in the report will help unlock the financial chains of human trafficking and modern slavery”, says Dr Cockayne. “Actors dedicated to this cause hope to galvanise a community that will break the ties between the financial sector and modern slavery. This means encouraging leadership — for example, by promoting effective ‘safe harbour’ provisions to facilitate information-exchange, by improving suspicious activity reporting, and by using banks’ investment decisions to prevent these crimes occurring in the first place — to turn up the heat on those who participate in this crime.”

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About UNU

The United Nations University (UNU) is an international community of scholars engaged in policy-relevant research on pressing global issues, specialised postgraduate training and capacity building, and the dissemination of knowledge. UNU functions as a think tank for the United Nations system. It operates as a global network of institutes and programmes, coordinated by UNU Centre in Tokyo.

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Notes for journalists

The preparation of this UN University report was supported by the government of Liechtenstein, a long-time advocate for international accountability for human rights violations.

This UN University report summarises discussions held in March 2017 amongst a select group of nearly 100 experts from the financial sector, financial regulators, investigators and prosecutors, anti-slavery organisations, and key practitioners from around the world. These discussions were held at Grace Farms, a new centre for nature, arts, justice, community, and faith, in New Canaan, Connecticut.

Other examples that government regulators and investigators are paying increased attention to the crimes mentioned in this report:

In 2014, the US Financial Crimes Enforcement Network (FinCEN) issued an Advisory on identifying activity that could be indicative of human trafficking and human smuggling. Reporting of relevant suspicious activity subsequently increased by 900%.

In 2016, the Canadian Financial Intelligence Unit issued an Operational Alert “recognizing the money laundering activity of human traffickers in sexual exploitation”. They saw a 500% rise in related reporting between 2015 and 2016, and were able, as a consequence, to help law enforcement locate and rescue numerous women trapped in sexual exploitation.

In 2015, Thai authorities seized assets worth more than USD 1 million from individuals suspected of human trafficking.

Brazil has been tackling the role of the financial system in slavery-like practices for several years.

The Dutch financial intelligence unit has recently undertaken a detailed study, Project Micri, looking at how migration-related crimes, including human trafficking, show up in formal financial sector records.